Following the recent suspension from trading at the Botswana Stock Exchange (BSE) and the Central Securities Depository Botswana (CSDB), the embattled Stock Brokers Botswana (SBB) has been put under statutory management.
Sunday Standard has been informed that Bookbinder, corporate law firm Partner Jeffrey Bookbinder is the newly appointed statutory manager of the country’s longest serving stock broker firm effective this past week.
“I confirm that I was appointed the Statutory Manager of SBB by the Non- Bank Financial Institutions Regulatory Authority in terms of Section 73 (4) NBFIRA Act and I have accepted the appointment,” said Bookbinder.
Quizzed on his immediate role as Statutory Manager, he stated that he is prescribed by Section 74 of the Act to manage the affairs of the institution to the exclusion of its directors and other managers. He added that he has the power to repudiate a contract to which the institution is a party, but only if the statutory manager considers the contract detrimental to the interests of clients of the institution; and also be entitled to receive such remuneration from the institution as the High Court orders.
“The statutory manager of a prudentially regulated non-bank financial institution shall manage the affairs of the institution with the greatest economy possible compatible with efficiency and, as soon as practicable, shall report to the Regulatory Authority,” he stated.
He further said that the statutory manager of a prudentially regulated non-bank financial institution is not liable for a loss that the institution suffers unless it is established that the loss was caused by the statutory manager’s fraud, dishonesty, negligence or wilful failure to comply with the law.
“In terms of Section 74 (2) (a) of the Act, the management and the Board of Directors are excluded from the day to day Management of SBB during the Statutory Manager’s tenure of office,” said Bookbinder.
At the same time, after appointing the statutory management, the Non Banking Financial Institutions Regulatory Authority (NBFIRA) is said to be continuing with its intensive investigations on the matter.
Details of the investigations carried by NBFIRA and BSE are expected to shed new light on the extent of operational issues at the Stock Broker Botswana. Insiders said this week that such issues include employing the company’s finance manager without undergoing the proper vetting process by NBFIRA at beginning of the year.
The statutory manager, Bookbinder was appointed to protect the interests of the account holders who have been advised to approach any of the other three brokers, Imara Securities, Motswedi Securities and African Alliance to transfer their accounts from SBB if they are trading.
Both the indefinite suspension of SBB and statutory management of the firm will only be lifted once the firm implements all pending operational issues.